State ex rel. Spire v. Northwestern Bell Telephone Co.

• Citation: 445 N.W.2d 284,233 Neb. 262
• Decision Date: 01 September 1989
• Docket Number: No. 87-425,87-425
• Court: Supreme Court of Nebraska
• Parties: STATE of Nebraska ex rel. Robert M. SPIRE, Attorney General of the State of Nebraska, Appellant, v. NORTHWESTERN BELL TELEPHONE COMPANY et al., Appellees.

Page 284

445 N.W.2d 284

233 Neb. 262

STATE of Nebraska ex rel. Robert M. SPIRE, Attorney General of the State of Nebraska, Appellant, v. NORTHWESTERN BELL TELEPHONE COMPANY et al., Appellees.

No. 87-425.

Supreme Court of Nebraska.

Sept. 1, 1989.

Syllabus by the Court

1. Declaratory Judgments: Judicial Construction: Statutes. A declaratory judgment action, pursuant to Neb.Rev.Stat. §§ 25-21,149 et seq. (Reissue 1985), is an appropriate method to obtain a judicial construction

of a statute or determination of a statute's validity, including resolution of a challenge to the constitutionality of a statute.

2. Declaratory Judgments. In a declaratory judgment action involving the determination of factual issues, such issues may be tried and determined as in other civil actions.

3. Declaratory Judgments: Appeal and Error. In appellate review of an action for a declaratory judgment in a law action, factual findings by the trier of fact will not be set aside unless the findings are clearly erroneous.

4. Declaratory Judgments: Equity: Appeal and Error. In appellate review of an action for declaratory judgment in an equity action, the standard of review for an equity case applies.

5. Declaratory Judgments: Appeal and Error. In an appeal from a declaratory judgment, the appellate court, regarding questions of law, has an obligation to reach its conclusion independent from the conclusion reached by the trial court.

6. Equity: Appeal and Error. In an appeal of an equity action, the Supreme Court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, where credible evidence is in conflict on a material issue of fact, the Supreme Court considers and may give weight to the fact that the trial court heard and observed the witnesses and accepted one version of the facts rather than another.

7. Constitutional Law: Statutes: Proof. One claiming that a statute is unconstitutional has the burden to show that the questioned statute is unconstitutional.

8. Constitutional Law: Public Service Commission: Jurisdiction: Legislature. Although the Public Service Commission is an independent regulatory body under the Nebraska Constitution, Public Service Commission jurisdiction to regulate common carriers may be restricted by the Legislature through "specific legislation." Neb. Const. art. IV, § 20.

9. Constitutional Law: Public Service Commission: Jurisdiction: Legislature. The Legislature cannot constitutionally divest the Public Service Commission of jurisdiction over a class of common carriers by vesting a governmental agency, body of government, or branch of government, except the Legislature, with control over the class of common carriers.

10. Constitutional Law: Public Service Commission: Jurisdiction: Legislature. A legislative act or statute may constitutionally divest the Public Service Commission of jurisdiction over common carriers to the extent that the Legislature, through specific legislation, has preempted the Public Service Commission in control of common carriers.

11. Constitutional Law: Public Service Commission: Jurisdiction: Legislature. While the Legislature may constitutionally occupy a regulatory field, thereby specifically and preemptively excluding the Public Service Commission from some control over a class of common carriers, the Legislature cannot absolutely and totally abandon or abolish constitutionally conferred regulatory control over common carriers.

12. Constitutional Law: Property: Due Process. A ratepayer's right to a fair and reasonable rate is a property entitlement protected by the due process clauses of the U.S. and Nebraska Constitutions.

13. Constitutional Law: Due Process: Notice. Only governmental decisions adjudicative in nature are subject to the procedural due process requirement of notice and hearing; legislative action is exempt from the constitutional protection of procedural due process.

14. Constitutional Law: Property: Due Process: Notice: States. Where the state grants its citizens a statutory right to notice and hearing on a matter or in a proceeding, the state, in making legislative determinations affecting a citizen's property right, must adhere to a procedure which comports with the requirements of the due process clauses of the U.S. and Nebraska Constitutions.

15. Constitutional Law: Statutes. When a fundamental right or suspect classification is not involved in legislation, a legislative act is a valid exercise of a state's police power if the act is reasonably related to a legitimate governmental interest.

Robert M. Spire, Atty. Gen., John R. Thompson, Dale A. Comer, and L. Jay Bartel, Lincoln, for appellant.

J. Taylor Greer, Bert L. Overcash, and Paul M. Schudel, of Woods, Aitken, Smith, Greer, Overcash and Spangler, Lincoln, Harold L. Rock, David A. Jacobson, Maureen E. McGrath, and Nancy L. Dickhute, of Kutak Rock & Campbell, Omaha, Richard A. Peterson, of Peterson Nelson Johanns Morris & Holdeman, Lincoln, and Mark E. Belmont, Omaha, for appellees.

HASTINGS, C.J., and BOSLAUGH, WHITE, CAPORALE, SHANAHAN, and GRANT, JJ., and ENDACOTT, District Judge.

SHANAHAN, Justice.

The Attorney General of the State of Nebraska, as relator, brought a declaratory judgment action in the district court for Lancaster County to have 1986 Neb. Laws, L.B. 835 (the act), now codified as Neb.Rev.Stat. §§ 86-801 et seq. (Reissue 1987), declared unconstitutional on a number of grounds. The respondents, Northwestern Bell Telephone Company (NWB), Lincoln Telephone and Telegraph Company (LT & T), and AT & T Communications of the Midwest, Inc. (AT & T), which have litigable interests in the validity of the challenged act, contended that L.B. 835 was constitutional in all the provisions challenged by the Attorney General. The district court declared that L.B. 835 is "valid, constitutional, validly enacted and of lawful force and effect."

The Attorney General appeals, assigning as error the district court's (1) failure to hold that L.B. 835 unconstitutionally divests the Nebraska Public Service Commission (PSC) of its regulatory authority, granted in Neb. Const. art. IV, § 20, over telecommunications companies; (2) erroneous conclusion that L.B. 835 constituted valid "specific legislation" under Neb. Const. art. IV, § 20; (3) erroneous conclusion that telephone subscribers are not entitled to procedural due process in connection with telephone rate review proceedings conducted pursuant to L.B. 835; (4) erroneous conclusion that L.B. 835 contains adequate due process safeguards for telephone subscribers, assuming that subscribers are entitled to such protection; and (5) erroneous conclusion that the legislatively expressed goals of L.B. 835 may be fulfilled as a valid exercise of the state's police power.

STANDARD OF REVIEW

A declaratory judgment action, pursuant to Neb.Rev.Stat. §§ 25-21,149 et seq. (Reissue 1985), is an appropriate method to obtain a judicial construction of a statute or determination of a statute's validity, including resolution of a challenge to the constitutionality of a statute. Mullendore v. School Dist. No. 1, 223 Neb. 28, 388 N.W.2d 93 (1986).

In a declaratory judgment action involving the determination of factual issues, such issues may be tried and determined as in other civil actions. § 25-21,157; Millard Rur. Fire Prot. Dist. No. 1 v. City of Omaha, 226 Neb. 50, 409 N.W.2d 574 (1987). In appellate review of an action for a declaratory judgment in a law action, factual findings by the trier of fact will not be set aside unless such findings are clearly erroneous. Heimbouch v. Victorio Ins. Serv., Inc., 220 Neb. [233 Neb. 265] 279, 369 N.W.2d 620 (1985). In appellate review of an action for declaratory judgment in an equity action, the standard of review for an equity case applies. OB-GYN v. Blue Cross, 219 Neb. 199, 361 N.W.2d 550 (1985). In an appeal from a declaratory judgment, the appellate court, regarding questions of law, has an obligation to reach its conclusion independent from the conclusion reached by the trial court. County of York v. Johnson, 230 Neb. 403, 432 N.W.2d 215 (1988).

A declaratory judgment that L.B. 835 is unconstitutional might be a basis for injunctive relief against enforcement of the act and, unrelated to a claim for damages, is more akin to relief through an equity action rather than relief through a law action. Cf. State ex rel. Spire v. Public Emp. Ret. Bd., 226 Neb. 176, 410 N.W.2d 463 (1987) (action for a declaratory judgment that a statute was unconstitutional and for an injunction against enforcement of the unconstitutional statute). Consequently, in the present appeal we apply the standard for review of an equity appeal:

"In an appeal of an equity action, the Supreme Court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, where credible evidence is in conflict on a material issue of fact, the Supreme Court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another."

Frenzen v. Taylor, 232 Neb. 41, 42, 439 N.W.2d 473, 474-75 (1989).

One claiming that a statute is unconstitutional has the burden to show that the questioned statute is unconstitutional. Ewing v. Scotts Bluff Cty. Bd. of Equal., 227 Neb. 798, 420 N.W.2d 685 (1988); Weiner v. State ex rel. Real Estate Comm., 217 Neb. 372, 348 N.W.2d 879 (1984).

ACRONYMS AND TELEJARGON

As the result of United States v. American Tel. and Tel. Co., 552 F.Supp. 131 (D.D.C.1982), aff'd 460 U.S. 1001, 103 S.Ct. 1240, 75 L.Ed.2d 472 (1983), divestiture of AT & T caused dramatic changes in the telecommunications industry. The nation was divided into telephone service geographic areas called LATAs, an acronym for "Local Access and Transport Areas." The Bell operating companies, such as NWB, became subsidiaries of a regional...